The left wing case for quitting the EU

Thu 1st Oct 2015

Much of the left would agree that the European Union does not always function in the best interests of either the European or International working class. However, there is considerable disagreement over whether our overall position should be to stay in the EU and try and reform it into more of a Social Europe, or whether we should declare the EU irredeemably flawed, withdraw and focus on building international support and solidarity outside the EU project. This paper outlines a case for withdrawal.

This paper will be split into five parts. First we will briefly examine the history of European integration since 1945, and how the EU came into being. Next we will look at the major bodies of the modern EU, and critique their roles. We will then look at why the EU came into being from a Marxist perspective. Moving from theory to a more pragmatic approach, we will look at several myths and misconceptions around why Britain should remain part of the EU and complete with an examination of what we can now do.

After WWII there was a feeling among the ruling class that there should be greater integration between the states of Western Europe. Important early markers of this were the Hague Congress in 1948, that established the College of Europe “where Europe’s future leaders would live and study together” (1) and the creation of European Coal and Steel Community in 1952. The Treaty of Rome in 1957 created the European Economic Community between Belgium, France, Italy, Luxembourg, the Netherlands, and West Germany. This established a customs union (an area where there is no tax on goods moved within the area, and centrally decided tax for goods moving into the area). A European Atomic energy community was created in the same year, and all three groups united under a merger treaty in 1967. Over the next 20 years, more countries joined including the UK in 1985. Also in 1985, the Schengen agreement removed passport controls between member states, although the UK is not a signatory to this. In 1993, the Copenhagen agreement established the criteria which new countries had to meet in order to be eligible to apply to join. In 1992 the Maastricht treaty was signed. This not only widened the scope of previous treaties, but started the process of creating a single currency and, importantly, set economic requirements for the member states. This included things such as “sound fiscal policies, with debt limited to 60% of GDP and annual deficits no greater than 3% of GDP” (2) and, for countries wishing to join the single currency, limiting inflation to within 1.5% of the minimum within the union and interest rates to within 2% of the minimum within the union. This effectively limits countries from borrowing to invest and also enforces austerity. In 2002 the euro was introduced, and the membership has gradually pushed further and further east. The Lisbon treaty in 2007 added further centralisation to the EU, creating a permenant president of the European Council and further merging EU structures into one body.

All EU countries had to ratify the treaty, however Ireland was the only country that had a public referendum on the treaty. This referendum rejected the Lisbon treaty, but a modified version was forced through.

The next section is a run through of the major bodies of the EU to enable us to analyse them more effectively. First there is the EU Parliament, made up of 751 MEPs elected every 5 years. Their role is to pass laws based on proposals from the European Commission, asking the commission to propose legislation, making decisions on international agreements and EU enlargement, ratifying the budget and scrutinising the work of the European Council and European Commission (3). You will note that none of these roles includes actually proposing and passing legislation, simply endorsing or rejecting laws proposed by the Commission. As the Campaign Against Eurofederalism points out “The European Parliament cannot raise taxes, write the Budget, raise an armed force or a police force, does not control the mint or the European Central Bank. The Parliament cannot initiate legislation but does ‘co-decide’ with the Council of Ministers on legislation which emanates from the Commission. Legislation can be blocked by the Parliament but this can be got around by the Commission representing this in an amended form”. (4) The EU itself admits that “The Council is not legally obliged to take account of Parliament's opinion but in line with the case-law of the Court of Justice, it must not take a decision without having received it” (5)

The next body to be addressed is the European Council. This is a meeting of relevant government ministers from each EU country aiming to discuss issues, amend and adopt laws and co – ordinate policies on an EU wide basis (3). Government ministers are also able to commit their national governments to the actions agreed during the meetings (3). Confusingly there is also a Council of Europe. This is a meeting of heads of state of the national govenrnments, chaired by a permanent president who is selected by the heads of state. This body sets the long term political direction of the EU, but doesn’t directly have any role in law making. Last, but by no means least, is the European Commission. This body is the executive arm of the EU. It is made up from Commissioners, one from each member state. These Commissioners are appointed by the national governments, there are no elections to get the position and no way to remove a Commissioner that is not serving the interests of their population. The Commission’s two main roles are being the only body that can actually propose legislation, and the body responsible for implementing any legislation made (3). Therefore, they have tremendous power to dictate the policies and practices of the EU.

Other important bodies include the European central bank, and the European Court of Justice. This is completely different to the European Court of Human Rights, which is not even an EU body. The Court of Justice is an important body in the EU as it’s role is to limited "to meet objectives of general interest recognised by the Union" (6). This means that, should progressives ever manage to take control of the Council of Europe, the European Commission and the European Parliament, they could be prosecuted in the Court of Justice as one of the standards that the Court is legally bound to uphold is the right of businesses to 'freedom of establishment' (6). Some on the left have celebrated the Court of Justice as EU law takes precedence over national law, and therefore felt that the EU can enforce workers rights against a right wing national government. However, the rules surrounding the Court say “the modalities and limits for the exercise of collective action, including strike action, come under national law and practices” (6). In cases such as the Viking and Vaxholm cases the COJ ruled that multinationals could import labour from Eastern Europe to Scandinavia and pay them at the much lower Eastern European rate (7), thus showing that the COJ is firmly on the side of big business. If further evidence is needed, the COJ has given a green light to tax evasion. There is a popular scam by multinational corporations operating in a EU country with a high tax rate to set up a subsidiary in an EU country with a much lower tax rate.

The majority of profits can then be declared as being made in the subsidiary, resulting in a much lower tax bill (8). This was challenged, but the COJ ruled that this would only be illegal if one could prove that the subsidiary was SOLELY set up to avoid taxes (8).

To understand the purpose of the EU under capitalism, we must turn to a Marxist analysis. Capitalists employ workers to turn raw materials into a product which can then be sold. The capitalist’s income is made from profits; that is the amount that the final product is sold for, minus the cost of the raw materials and the wages paid to the workers. The capitalist will want to maximise profits, and the easiest way to do this is to reduce the amount that they pay to workers as much as possible, as the capitalist has more control over wages than over the cost of raw materials. However, the employees of the capitalist class are also the customers of the capitalist class. This leads to problems as if, by definition, the workers are being paid less than the value of the final products, they can not afford to buy all the products the capitalists are trying to sell, and so there is a “crisis of overproduction”. There are various ways that capitalism deals with this, but one of the most popular is by opening up new markets for products. This means that your workers do not form ALL of your customer base, and so prolongs the time before an over production crisis. A traditional way of doing this is to go to war to conquer other countries (this has the additional benefit of creating a huge demand for goods during the war, and then again in rebuilding the conquered country. Collateral damage is worth big bucks).

However by establishing the EU, a British capitalist (for example) now has all of Europe as their customer base rather than just Britain. Also, the free movement of labour within the EU dramatically increases the pool of workers. This means that there is a massive supply of employees, for the same demand of jobs. Therefore, wages can be pushed down and “troublemakers” fired. Therefore, although much is made of the EU being good as it brought peace to Europe and promotes internationalism, it is actually that capitalism is simply staving off the crisis of over production in an era when capitalists have a multinational rather than national character. If further evidence is needed that the EU is an explicitly capitalist project, we need only to look at the Copenhagen criteria for membership of the EU that require “a stable democracy … and … a functioning market economy” (9)

We have outlined how the EU came into being as a capitalist entity and the ways in which it is fundamentally undemocratic. However, many argue that, from a pragmatic point of view, the EU should be supported as it brings benefits to working people. However, this position is based on some misconceptions and we will deal with some of them now. One major argument for the EU is that it gives working people access to the European Court of Human Rights. This is a misconception because the ECHR is not an EU body, and so access to it is in no way related to being an EU member. There is the suggestion, particularly in Wales, that millions of jobs are dependent on continued membership of the EU. However, this claim does not stand up to scrutiny. There was a study 10 years ago that 3.5 million British jobs depended on EU membership, however this study has since been disproven by the original author. Independent checking of the figures suggest “"Figures from the early 2000s suggest around three million jobs are linked to trade with the European Union, they don't say they are dependent on the UK being an EU member. Using similar methods, a similar figure today has shown closer to 4.5 million jobs, but this still doesn't show how many are dependent on UK membership” (10), in 2004 the National Institute of Economic and Social Research put the figure at 3.2 million jobs associated with export to EU countries, but also stated that “there is no…reason to suppose that many of these, if any, would be lost permanently if Britain were to leave the EU.” (10). There is also the fact that heavy industry is being relocated from the UK to other, cheaper parts of the EU under the freedom of movement of capital, which clearly costs jobs in the UK (10). Examples of this include Pergeot closing the Ryton plant in Coventry to relocate to Slovakia (10) and Ford moving production from Southampton to Turkey (10). This flight of capital to areas with the lowest wages is actively supported by EU regional funding (10). The Working Time directive has been tremendously valuable in industries like my own, medicine, however it is often made out to be more than it actually is. Not only are there ample opportunities for countries and employers to “encourage” their workers to opt out (11), some countries with very progressive Labour laws, such as France, have used the directive as a bench mark to pull back to and actually increase hours and worsen working conditions (11). This undermining of hard fought national agreements is the real motivation behind the directive (11).

I hope I have demonstrated that the EU is an undemocratic bosses club that serves the bosses interests, however left wing social movements, such as Syriza in Greece and Podemos in Spain are very wedded to the idea of remaining in the EU (12), and we are currently seeing the crisis of self destruction that this position has caused both within Syriza and in the whole of Greece. In Britain there is going to be a referendum on the EU in 2017. However one must not be fooled into thinking that Cameron and the conservatives actually want to leave the EU. Over the next 2 years we will inevitably see Cameron presenting a narrative that his threat of referendum has caused the EU to compromise and give Britain a much better deal, and that we should now all vote to stay in under the better deal. The mainstream media will also continue to present the EU as a left wing project, and portray all opposition as coming from a nationalistic and parochial far right. This will only serve to give a boost to UKIP and their allies, who will be seen as the only ones representing a significant section of euro – sceptic public opinion. It is the opinion of this author that the EU cannot be satisfactorarily reformed, and that the left should use the referendum period to strongly campaign for an exit. However, as mentioned before, there is considerable controversy within the left.

A debate should be had on the left to reach an informed, hopefully shared, position. This will allow us to speak with one much louder voice, whether the ultimate feeling is to stay or leave.

References

1. Mahncke D, Bekemans L, Picht R. The College of Europe. Fifty Years of Service to Europe, . Bruges1999.